What Is Skip Tracing?
Successful real estate investors and home flippers have a knack for finding off-market properties and buying them at a fair price before their competition finds those homes.
Sometimes, though, this process takes a little extra work. The most effective investors must become masters in skip tracing.
Some of these properties become available because the owner can no longer pay the mortgage, so they “skip out,” leaving town with no forwarding address. Identifying them and making them an attractive offer that solves their debt problem can be a win-win for real estate investors and owners.
A whopping 4.3 million people were unable to make their full mortgage payment in May 2020, the highest level since 2011. Although some of these homeowners will downsize, move or work out payment terms with their lenders, others will go missing. But savvy investors have an effective way to find them and provide financial relief.
Plus, homes that have fallen into disrepair can be eyesores and have an impact on an entire community’s property values, so investors who buy and repair these houses or multi-family buildings are ultimately helping neighborhoods.
A 5-Step Process for Effective Skip Tracing
You could spend hours knocking on doors, researching public records and searching for individuals online. Remember, however, that these homeowners do not want to be found, and every minute you spend manually tracing is one you can’t be buying and selling. There are better ways to do your skip tracing.
- Identify the neighborhoods or specific properties you are considering for investment. COVID-19 and the work-from-home imperative is leading to market shifts, so look for those hidden gems with growth potential. These areas have had the highest foreclosure rates, but be on the lookout for the next wave.
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